HS/HCS/SCS/SB 246 - This act revises provisions regarding the regulation of electric, gas, and water utilities.

The act removes the limitation on the residence of Commissioners, however, Commissioners would still be required to live within the State. This portion of the act is similar to SB 116 (2003).

The act gives the PSC Commissioners authority to have a technical advisory staff. This staff would consist of a pool of up to six full time employees and each Commissioner could hire up to one personal advisor. Before these employees could be hired the Commission would have to correspondingly eliminate comparable positions within Commission staff to accommodate the hiring of the technical advisory staff such that there would be no net gain of employees to the PSC as a whole and at a cost neutral level. Technical advisory staff must be hired by July 1, 2004. The technical advisory staff would render advice and assistance to the Commissioners and provide relevant updates to the Commission. Each of the technical advisory staff would be subject to the same ex parte communication and conflict of interest requirements as the Commissioners. No person could be hired as part of the technical advisory staff within two years of employment with certain divisions of the PSC, corporations regulated by the PSC or the Office of Public Counsel. The technical advisory staff will never be a party to proceedings before the PSC.

The act also delineates standards for the PSC regarding ex parte communications. Commissioners may confer with members of the public, any public utility or similar commission and the act sets for the procedural guidelines for these communications.

The Public Service Commission is allowed to approve tariff or settlement agreement programs for assisting low-income residential ratepayers. The PSC may also approve energy efficiency, weatherization and evaluation components as part of the programs.

The act requires persons and entities who have or acquire legal or equitable interest of 5% ownership or greater of both a public utility subject to PSC regulation and the utility's suppliers to give notice to the PSC within 30 days. Failure to provide the required notice is a Class A misdemeanor.

The act allows telecommunications companies to offer term agreements of up to five years on its telecommunications services. Telecommunications companies are also permitted to offer discounted rates and promotions to new or former customers. These provisions are contained in SS/SCS/HB 208 (2003).

This act allows gas and electrical corporations to file a petition with the Public Service Commission (PSC) for a determination of ratemaking principles and treatment which would apply to the recovery of costs for the construction of a new facility in order to assure the financial community that the company will earn a return on common equity sufficient to ensure confidence in the financial integrity to maintain the credit and ability of the company to attract capital. The company must also file prepared direct testimony and exhibits supporting the company's application which shall also be served on the Office of Public Counsel. Public notice and intervention shall be allowed. The application may be joined with an application for a certificate of convenience and necessity. In order to be eligible for such a determination, the facility must be a gas or electric plant which would have a total investment or least cost of at least $5 million for companies serving between 100,000 and one million customers and $25 million for companies serving more than one million customers.

The PSC must then issue an order setting forth the ratemaking principles and treatment in all rate cases after the facility is placed in service. If the PSC fails to issue a determination within 180 days of the application, the ratemaking principles and treatment proposed by the company will apply. Once the order is issued by the PSC, the company has 12 months to notify the PSC whether it will proceed with the project. This portion is similar to SB 366.

This act allows electrical corporations to recover reasonably and prudently incurred costs for natural gas and purchased electrical energy through energy adjustment rate schedules. The schedules who must be filed with the commission and may be implemented in conjunction with a general rate proceeding or without a general rate proceeding.

An electrical corporation must to submit to a general rate proceeding to determine the level of fuel costs contained in the base rates prior to the initial establishment of the adjustment rate schedules and must submit to a general rate proceeding every three years if they choose to use the energy adjustment rate schedules. During that proceeding the Commission may consider the sensibility of the fuel costs and purchased power costs. The Commission is authorized to adjust the electrical corporations rate of return on equity in any general rate proceeding to compensate for the reduction in risk resulting from the fuel adjustment mechanism. Electrical corporations shall not avoid any rate freeze conditions or other conditions that are a part of any settlements of any general rate proceeding.

Changes in the rate schedules may be made as frequently as every 30 days. A "true-up" procedure similar to the purchase gas recovery for gas corporation will be used to remedy over- collections. Only certain electrical and natural costs which are specified are recoverable. If an electrical corporation has adjustment rate schedules on file with the PSC, they must also submit an energy adjustment report to the PSC by the 15th of each month.

The method for calculating the adjustment rates is specified in a calculation provided in the act. Adjustment rate schedules which are filed with the PSC must include detailed records, workpapers, and calculations for the PSC to make a determination on the level of the energy adjustment rate. Copies of such records must also be provided to the Office of Public Counsel. The adjustment rate schedules will be come effective 30 days after filing and are not subject to suspension by the PSC. Such filings shall be considered on an expedited basis and the procedure for handling such filings is specified. These provisions will expire on August 28, 2008. This portion is similar to SCS/SB 278 (2003).

This act allows gas and corporations to file a petition with the Public Service Commission to recover costs associated with certain infrastructure system replacements once per year. This charge is referred to as an infrastructure replacement surcharge (ISRS). The ISRS must produce at least $1,000,000 in revenues but not in excess of 10% of the water or gas corporations's base revenue level. A company seeking approval of an ISRS must have had a general rate proceeding within the last three years to begin or continue collecting the ISRS.

Petition filing requirements for the ISRS are specified in the act as well as factors which may be considered by the PSC in its evaluation of the petition. The corporation is required to reconcile the revenues generated with the underlying costs of the infrastructure replacements. The PSC is given authority to promulgate rules for the implementation of these provisions.

The act also allows electric, gas, and water corporations to recover prudent expenditures for security measures incurred after August 28, 2003. Applications for recovery of such items shall be confidential as determined by the PSC. Electric corporations may also apply to the PSC to recover unreimbursed costs for capital projects for required relocations. Such recoveries may only begin or continue if the corporation has been subject to a general rate proceeding within the past three years. These provisions are similar to SCS/SBs 125 & 290.

A steam heating company having fewer than 100 customers in the state may file under the small company rate procedure established by the PSC. The company must notify the secretary of the PSC, office of public counsel, each customer and each gas and electric corporation providing utility service in the area.
CINDY KADLEC

HA 1 - MODIFIES PROVISIONS WHICH ENABLE A UTILITY TO ENGAGE IN HVAC SERVICES.

HA 3 - ADDS REQUIREMENT FOR A WATER CORPORATION TO PAY INTEREST ON OVERCOLLECTED REVENUES FOR AN ISRS IF THERE IS A REFUND.

HSA 1 TO HA 4 - AUTHORIZES A TELECOMMUNICATIONS COMPANY TO OFFER DISCOUNTED RATES OR OTHER SPECIAL PROMOTIONS ON ANY OF ITS SERVICES TO ANY NEW OR FORMER CUSTOMERS.

HA 6 - ADDS REQUIREMENT FOR A GAS CORPORATION TO PAY INTEREST ON OVERCOLLECTED REVENUES FOR AN ISRS IF THERE IS A REFUND.